Thursday, March 26, 2009

Deciding in the Dark?

Written and posted by Jim Foster, a member and candidate for the Chestnut Hill Community Association Board of Directors, and publisher of the Mt. Airy and Germantown newspapers.

I sent this piece to the CHCA Board Discussion Group, because we need more accurate, current financial information before we talk about hiring a "publisher." It's an attempt to appeal to sanity, and give a larger picture of what the last few years' faulty administration have done to the CHCA and its Trust Fund:

My observations sent to the board follow:

My recent comments through the board discussion group brought the usual personal insults and unfounded accusations, so I decided to reply from an entirely different perspective that possibly might be meaningful to both long term and newer board members. As with most organizations gone awry, it is usually about the money, where it went, and who used it outside of the intended purposes. This situation is no different.

We are being asked to vote tonight on a new budget, but without any clear understanding of our financial condition from our own auditors. Even the 3/31/08 figures we won’t have are a year old. Internally generated statements have been flawed and do not properly present the separated costs of running the CHCA from the Local. We are being asked to approve the concept of hiring another executive to remedy problems that no one fully understands in the first place. Since a full year has past and our auditors told us that they had reservations about the CHCA as a “going concern” last year, I would want to know their position in detail going ahead, and I would want to see some accountant’s interim figures to back up where we have gone during this past year, or wait until a draft of the 3/31/09 figures are ready. We are told they will not be delayed, and should be ready before the 45 day required filing by the IRS. You must know where you are before determining where you are going.

The statement below I sent last night to a board member who accused me of not thinking ahead. Maybe all those who have been told to believe my motives are suspect would reserve judgment until they digest what I state here and ask their own questions:

To a board member businessman:

Let me take one step back and see if I can get through on another channel. Since you are a businessman, maybe you can understand the financial loss to Chestnut Hill this runaway reckless management has cost you.

From about 1998 to the present the reckless and illegal use of trust fund money has seen the loss of principal that now totals near a million dollars. When the IRS and the State allow an entity to get a tax exemption, that now becomes publicly regulated money. On top of that the trust itself requires the trustees to wisely invest the money for the purposes outlined in the trust. The betterment of Chestnut Hill is that purpose.

Now, if that money wasn’t squandered by turning it over to insider “investment counselors,” wasted on enterprises that neither the board or the trustees knew anything about running, friends of developers who used Fund and CHCA cash to enrich themselves, and brokers who helped hide illegal transfers, then that money would still be in the Fund earning interest.

You can do a lot of good for Chestnut Hill with just the interest on a safely invested million dollars. At one point this fund had a nearly two million dollar value. Today it would not likely reach a million with the current real estate market and the massive waste in speculative and unsupervised investments. The Fund was not supposed to be the financial sandbox for a few folks who ran the board. That is the part of the story that has not yet been fully told. If that much public money being mismanaged and covered up does not bother you, then I guess we have a different value structure. It’s a lot like those TV promotions for Las Vegas - - what happens in Chestnut Hill stays in Chestnut Hill. That might be OK for your money, but not the public money and the contributed money that members and contributors think is doing civic good.

6 Comments:

Anonymous said...

Mr. Foster,You may have selected a different channel but your show is the same. Your rants are giving Gunsmoke serious competition for longest running fictional drama. Your show is The Fugitive without the one armed man. It's time to bring the curtain down. Go away.

Your habitual use of insinuating adjectives and financial hyperbole contributes nothing to this community. Your show has very few fans, most are carpetbaggers like yourself. Your listeners continue to waste the community's time with their childish and frequently vulgar disruptions. GO AWAY.

You've been pissing in OUR sandbox for too many years. You have no stake here by any measurement; no residence, no business, nothing. Go save the world someplace else.

Would whomever is giving space to cowards who refuse to sign their names please stop? Those who don't have the guts to insult people to the face should not have the right to do so from behind their mothers' skirt. Nothing is more indicative of the level of courage and personal responsibility in 19118 than this pussy-ass shit. Ed (You live in fear-and you should)Feldman

Too many of your comments are poorly based and that obliterates the good points I think you are trying to make.

1. Obviously the need for another executive (the publisher?) must be weighed against the ability to pay.

2. I don't believe the prior year audited statements were ever available at budget time. Internal financials clearly show all you need to know about "where you are". They clearly show the CHCA and Local financial information separately. The Treasurer can add any amount of detail you need to these reports but, in my opinion, they are already sufficiently detailed to enable budget considerations.

3. Concerns for the financial health of the CHCA have always existed for good reason. Dues are kept low to encourage membership so dues can not pay for the mandatory Community Manager or CHCA expenses. Also, strictly speaking, CHCF funds may not be used to pay these costs. It has always been a challenge for the Treasurer to cover CHCA costs. Income from fund raisers typically goes to the Fund to allow contributors some tax deduction. Profit from the Local has usually been used to help pay for the CHCA.

4. Your charges of "reckless and illegal use of trust funds" is harsh and wrong. When the Fund trustees moved CHCF money from bonds to stocks a decade ago, they were tring to increase the value of the Fund. They could not have known the market would tank in the early 2000's and then again recently. If by "insider investment counselors" you are referring to a Board member who worked for a brokerage, his services were not compensated and his advice was equal to what would have been given by any competent and knowlegeable advisor. Funds that went to another Board member's company constituted a conflict of interest and should not have been allowed by the Board but it was not illegal. He was not enriching himself by trying to cover his expenses.

5. You began by complaining that you were insulted but you proceeded to insult board members and Fund trustees who were most likely doing the best they could given the circumstances. All CHCA and CHCF money is spent by vote of the full Board. You needed to speak up when those votes were taken. If you did speak up and lost that debate, drop it.